Wah Lau! Alamak! Too Much!

By Pete Brunoehler

By Pete Brunoehler

As we reach another year’s end, you may be setting your staff’s 2018 salaries and targets. Let this serve a timely reminder that you are doing so within the ever-present negotiating culture that exists here in Malaysia.

In much of the purchasing done in Malaysia, from the pasar malam (night market) to those customers who are buying your company’s products or services, a discount from the published, list, or initially stated price is customary and expected. Malaysian culture has an overriding mindset that virtually everything is negotiable. In fact, Malaysians and experienced expats are often shocked that so many foreigners don’t bargain more, since it is so ingrained here, and since the discount is essentially assumed and built into the expected final pricing.

In an ‘external’ business context (with your customers or suppliers), this practice allows the purchasers of products or services to illustrate to their employers and bosses that they are doing their job well. So discounts are a common, expected, and accepted business practice. Anticipate that your product or service will be discounted, and determine your pricing policy accordingly. And whenever you are the purchaser, bargain accordingly. Nobody will be surprised if you bargain; they expect it. Remember, virtually everything is negotiable here.

But it is within an ‘internal’ business context (with your employees) that expats in Malaysia often struggle with this negotiation mentality. Global studies of work-related ‘needs and job satisfaction providers’ will often point out the significantly higher importance placed on compensation in Asia versus the West (where more importance is usually placed on satisfaction from the work itself, the opportunity for training and advancement, etc.). This difference will visibly manifest itself when you are setting salaries, sales, or performance targets with your managers and staff. Those previously polite, agreeable, and perhaps even slightly timid Malaysian staff will roar to life when it comes to these target-setting/income-related discussions, laying out a lengthy and thoroughly depressing list of reasons why your industry is failing, your competitors are thriving, your company is hopeless, and the sky is indeed falling. Fear not! These are classic negotiating tactics; the difference here being that those staff you are negotiating with may shock you with their level of intensity in this (and often only this) discussion. This will hold true when you address compensation during job offers, when setting targets and salaries with existing staff, and when composing or revising commission and incentive plans. Personally, I respect well-founded counterarguments, and feel that these performance – and compensation – related numbers should certainly be dialogued, rather than just going in one direction, in all companies and cultures. Just be prepared for those managers and staff who are typically very agreeable and docile on daily matters to be more combative and challenging on money matters. I was taught long ago that, in Asia, ‘you don’t mess with the rice bowl’ – the local euphemism for income. Fair warning then, to be well-prepared and expect major pushback in these discussions.

1) My experiences with Western employees have often led me to mentally place them into either an ‘argues with most everything’ or ‘agrees with most everything’ category. I found they tended to be pretty consistent, regardless of the subject at hand.

2) However, Malaysian employees who would normally fall into the latter category often shift to the former when it comes to numbers that impact performance measurements, especially if they carry income implications.

3) The good news here is that once the numbers are set, those temporarily emotive and combative employees will return to their more conventional behaviour – at least until it’s time to set new targets or discuss salary increments again!

4) Negotiating hard at the night market is fun and will not offend anyone. Either party can always walk away – similar goods will often exist in a nearby stall – but the verbal banter and back and forth is truly entertaining and one of the highlights of the experience.

All of us want to have a say when discussing salaries, targets, commissions, bonuses, etc. Studies and personal experience have taught me that it’s definitely a time of heightened tension in Malaysia. So prepare, communicate, and push within reason, but listen carefully as well; and I am confident you’ll come to a fair resolution with (for now) intensely engaged Malaysian staff. That’s good, locally adapted leadership.

Merry Christmas and Happy New Year to all readers in this holiday season!